sec 40(b)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 July 2010 on ammendment of sec 40(b) remuneration limits, whether ammendment in partnership deed is required if partnership deed just mentioned the method of calculation of remuneration i.e based on previous limits of Rs 75,000?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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02 July 2010 Ammendment in partnership deed is required as the section has a clause as under:

"(ii) any payment of remuneration to any partner who is a working partner, or of interest to any partner, which, in either case, is not authorised by, or is not in accordance with, the terms of the partnership deed; or

(iii) any payment of remuneration to any partner who is a working partner, or of interest to any partner, which, in either case, is authorised by, and is in accordance with, the terms of the partnership deed, but which relates to any period (falling prior to the date of such partnership deed) for which such payment was not authorised by, or is not in accordance with, any earlier partnership deed, so, however, that the period of authorisation for such payment by any earlier partnership deed does not cover any period prior to the date of such earlier partnership deed; "

So amendment in deed compulsory and that too prospectively.